Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

What I [Clinton] can do….is explain why I think his approach is right and it’ll pay off if we renew his contract. [What I can do is] explain why the economy he faced was much weaker and different than the one I faced, so that there’s no way any president, no president could have restored it to full health in just four years.

Bill Clinton Returns to Yale (Photo credit: altopower)

This is jaw-droppingly ignorant of history, both recent and past. Some commentators have referred to Reagan’s “recovery” as one example of a rapid recovery from a recession. But that example is highly flawed. And it assumes that Reagan had anything to do with any such recovery at all. It is an argument that is flawed as well.

The economy when Jimmy Carter took over in 1976 was stagnant. Remember “stagflation” and Carter’s use of the word “malaise?” It was because of regulations, poor foreign policy decisions, and lack of certainty about the future that was holding the economy back. Inflation was eating away at people’s purchasing power, and Carter was quickly discerned to be weak and ineffective.

By 1979 inflation was running at 13 percent per year. At that rate, prices would double every four years (this is the rule of 72: divide the inflation rate into 72 and you get a doubling of the price level every 4 years.) That was frightening.

I was operating an office in Aspen, Colorado, at the time as an investment advisor. For a brief time I had my office inside a realtor’s office and was privy to what was happening in the Aspen real estate market at the time. Some of the realtors had put together price projections of where real estate prices would be if an investor would just buy now. It didn’t matter that prices were so high – so very high – that they had little basis in reality. Don’t look back, they said. Look forward! And out would come the charts: if you bought now, you’d be rich in 10 years!

It was the classic sign of a bubble.

And then along came Paul Volcker who decided – against the wishes of many – to raise interest rates to rinse out such inflationary expectations from the economy. He knew that such increases in the price level could destroy the economy and set the country (and the banks, especially the banks) back at least one generation.

He forced interest rates to over 20 percent, and quashed those expectations. But in so doing he set the stage for an economic recovery that just happened to take place when, guess who – Reagan – happened to be in the White House.

So let’s not hear any more nonsense about how a president can’t “fix” the economy in four short years. The president can do little about the matter at all.

The deadline for comments on the proposed Volcker Rule was Monday night and hundreds, if not thousands, of letters arrived at the last minute to rail against the rule, mostly from Wall Street. The Volcker Rule — which would prohibit banks from trading with their own money — was proposed last summer by former chairman of the Federal Reserve Paul Volcker, who said in a letter to President Obama that they shouldn’t be gambling with money guaranteed by the taxpayers. Big losses by government-backed banks that were trading in risky securities such as mortgage-backed assets precipitated the financial crisis in 2008 and set up the need for federal bailouts of those banks.

The idea behind the rule is simple: Prohibit banks from making “proprietary trades” that are unrelated to traditional banking practices such as making loans and clearing checks. Putting such rules down on paper however is proving to be daunting and giving the banks affected a chance to buy some time.

Volcker’s letter to President Obama was three pages long. The rule incorporated into the Dodd-Frank act was 10 pages long. By the time the four regulatory agencies empowered to oversee its implementation — the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, the Comptroller of the Currency, and the Securities and Exchange Commission (SEC) — got done with it, the Volcker Rule encompassed 298 pages.

The public comment period started when the FDIC signed onto the bill on October 11, and ended Monday, February 13 at midnight. The draft offered for comment contained 1,300 questions on 400 topics so that the agencies would be able to “discern” the right, proper, and appropriate course of action to take with the final draft. Implementation of the Volcker Rule is scheduled for July. This gave the banks a perfect opportunity to delay the whole process by complaining among other things that the bill is far too complicated for the banks to be able to comply by then.

As of Monday the SEC had already received over 14,000 letters, at least one of them 365 pages long. Some attempted to respond to all 1,300 questions with answers of their own while others posed new questions and offered significant revisions to the bill’s language.

But that was Monday. By midnight another 200 letters from the primary target of the bill—Wall Street banks and investment houses—were expected. Lawyers representing Goldman Sachs, Morgan Stanley, and Citigroup as well as the trade group itself, the Securities Industry and Financial Markets Association (SIFMA), spent the weekend holed up in hotels in downtown Manhattan cranking out long and detailed responses to the proposed bill.

The strategy is clear: Delay the matter until after the elections when the entire game could change, including the need to reintroduce the legislation for congressional and presidential review, probably with many new faces perhaps more favorable to tabling the matter altogether. Dennis Kelleher, president of Better Markets, a nonprofit pro-regulation group, said, “It’s part of their ongoing strategy—if you can’t kill the

While international cooperation on regulatory reform is difficult to achieve on a piecemeal basis, it may be attainable in a grand bargain that rearranges the entire financial order.

A new Bretton Woods conference, like the one that established the international financial architecture after World War II, is needed to establish new international rules…reconstitute the International Monetary Fund (IMF)…[and] to reform the currency system…

Claiming that the international monetary system “cannot survive in its present form,” Soros argues that it could and should be revamped so that American leadership would be “re-established…in a more acceptable form.”

As political commentator for the Concerned Women for American’s Legislative Action Committee and former speechwriter for former President George H. W. Bush, Janice Shaw Crouse celebrated Ronald Reagan’s 100th birthday with a paean of praise for the former President‘s skills as “The Great Communicator” which perfectly illustrates the perception of Reagan as a good conservative, at least when he spoke.

With the announcement by Reuters that former Federal Reserve Chairman Paul Volcker was going to resign shortly from the Obama administration came the temptation to reminisce about Volcker’s influence during the late ’70s and early ’80s when inflation exceeded 13 percent and interest rates on short-term government Treasury bills hit 21.5 percent.

New YorkGovernor David Patersonsaid in a radio interview on June 10 that his state might have to issue IOUs to pay its bills, or else face “anarchy in the streets.” The state faces a $9.2 billion deficit, and the legislature is two months late in voting on the budget. An actual shutdown of state services has been avoided, temporarily, by enacting temporary emergency spending bills. Even if the government shuts down, there is serious question about whether police, firefighters, prison guards and emergency and healthcare workers could continue to work without pay. “You could have anarchy literally in the streets if the government shuts down,” Paterson said.

He wasn’t the first one to float this recently. Charles Krauthammerwrote late last month that “as the night follows the day, the VAT cometh” and that “a national sales tax near-universal in Europe is inevitable.” Because of the huge deficits facing the nation, exacerbated by the newly passed ObamaCare bill, there is no way out except to raise taxes, according to Krauthammer.